Year-end money moves: FSA deadlines, tax prep, and benefit renewals
December is packed with quiet deadlines that can cost you real money if you miss them. This guide walks you through FSA spending, open enrollment, benefit renewals, and simple steps to get ready for tax season.
Key takeaways
- Most FSAs have a December 31 deadline to spend your balance or you lose the money.
- If you buy your own health insurance, enroll by December 15 on Healthcare.gov for January 1 coverage.
- Benefits like SNAP and Medicaid often need yearly renewal, so check for any paperwork waiting on you.
- Starting a simple folder for tax documents now makes filing easier and helps you avoid costly refund-advance traps.
The holidays get a lot of attention. But December also comes with a set of financial deadlines that most people never see coming. Miss them, and you could lose free money, pay more for health coverage, or face a scramble in January.
Here is what to watch for and what to do.
Use Your FSA Before December 31
A Flexible Spending Account, or FSA, lets you set aside pretax money for health or dependent care costs. The catch? Most FSAs have a 'use-it-or-lose-it' rule. Money left in your account on January 1 may be gone for good.
Check your FSA balance right now. Log in to your benefits portal or call your plan administrator. If you have money left, here are things you may be able to buy before the deadline:
- Prescription glasses or contact lenses
- Over-the-counter medicines, bandages, and first-aid supplies
- Dental work you have been putting off
- Flu shots or vaccines with a cost-share
- Menstrual care products
- Sunscreen and certain health monitors
Some plans offer a grace period into March or allow you to roll over up to $610 (the 2024 IRS limit). Check your plan documents to know which rule applies to you.
Open Enrollment Is Closing
If you get health insurance through your job, open enrollment usually runs in October or November, with coverage starting January 1. If you missed your window at work, you generally have to wait until next year unless you have a qualifying life event.
If you buy coverage on your own, Healthcare.gov open enrollment runs November 1 through January 15 in most states. Some states have their own marketplaces with different deadlines. To have coverage start January 1, you usually need to enroll by December 15.
If your income is low or moderate, you may qualify for lower premiums through advance tax credits. Medicaid and the Children's Health Insurance Program (CHIP) accept applications year-round.
Renew Benefits You Already Have
Programs like SNAP, Medicaid, and housing assistance often require yearly recertification. Missing a renewal deadline can pause or end your benefits, sometimes without much warning.
Check any letters or emails from your state agency. Deadlines vary by state and by program. If you have paperwork sitting on the counter, now is the time to open it.
Get Ready for Tax Season
Tax season starts in late January. A little prep now can save a lot of stress later.
Start a simple folder, paper or digital, and put these things in it as they arrive:
- W-2 forms from every employer (mailed by January 31)
- 1099 forms for freelance, gig, or contract work
- 1095-A if you got health coverage through the marketplace
- Records of any child care or education expenses
- Bank statements showing charitable donations
If your income is roughly $67,000 or less, you may qualify for free tax filing through the IRS Free File program. The Volunteer Income Tax Assistance (VITA) program offers free in-person help at community sites. Search for a VITA location at irs.gov or call 211.
Filing early also protects you from tax-related identity theft. If a scammer files a fake return using your Social Security number before you do, it creates a serious headache.
A Few More December Money Moves
If you plan to give to charity and want the tax deduction, donations must be made by December 31.
If you have a Health Savings Account (HSA), you actually have until the tax filing deadline in April to make contributions for the prior year. That is different from an FSA, so do not confuse the two.
If you are expecting a tax refund, avoid refund advance loans with high fees. Free filing options get your refund to you quickly through direct deposit, often within 21 days.
You Can Do This
None of these steps require a big income or perfect credit. They just require a little time before the calendar flips. Even checking one item off this list this week puts you ahead.
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Related FAQs
Common questions about this topic, answered simply.
What happens if I do not spend my FSA money before December 31?
In most cases, any unspent balance is forfeited after the plan year ends. Some employers offer a grace period of up to two and a half months or allow a rollover of up to a set dollar amount. Check your plan documents or call your HR department to find out which rule applies to your account.
What if I missed open enrollment at my job?
Generally, you have to wait until next year's open enrollment window unless you have a qualifying life event, such as losing other coverage, getting married, or having a baby. These events trigger a special enrollment period, usually lasting 30 to 60 days. Contact your HR department right away if you think you qualify.
How do I know if my SNAP or Medicaid needs to be renewed?
Your state agency will usually send a letter or notice before your renewal deadline. The timing varies by state and by household. If you have not seen a notice recently, log in to your state benefits portal or call your local office to ask when your recertification is due.
Is IRS Free File really free, and who qualifies?
Yes, IRS Free File is a no-cost federal tax filing option for people whose adjusted gross income is roughly $79,000 or less (the threshold can change each year). You file directly through partner software on the IRS website. The VITA program is another free option that offers in-person help at community locations for people who qualify.
What is the difference between an FSA and an HSA?
An FSA is usually offered through an employer and has a 'use-it-or-lose-it' rule with a December 31 deadline in most cases. An HSA is paired with a high-deductible health plan and your money rolls over every year with no deadline. You can contribute to an HSA until the tax filing deadline in April for the prior year, which gives you more flexibility.
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